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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
These appeals by the assessee are directed against the orders of the Commissioner of Income Tax (Exemption), Delhi [hereinafter referred to as “CIT(E)”] vide order dated 11-03-2026.
The assessee has raised the following ground in appeal number 4333/Del/2026 as under:
1.The impugned order is without jurisdiction and void. The CIT exceeded the statutory scope of inquiry prescribed under section 12AB(1)(b) of the Act.
2.Genuineness of charitable activities and objects were never in dispute. The sole statutory criterion for registration is satisfied rejection is therefore, unsustainable.
3.Registration under the correct Sub -clause would also have been granted automatically without any enquiry. No prejudice of any kind to the department or to revenue.
4.Finding of misrepresentation is perverse without evidence and legally erroneous. No mens-rea established or even alleged.
5.Double jeopardy Appellant being penalized twice for the same alleged act through two parallel proceedings.
6.Doctrine of legitimate expectation and estoppel- Registration acted upon for four years -irreversible prejudice to trust donors and beneficiaries.
7.Impugned order fails to engage with submissions and judicial precedents in meaningful manner -not a reasoned order.
8.Professional complexity of the statutory framework – Error made in good faith -cannot constitute misrepresentation or specified violation
Ground raised in appeal no. 4334/Del/2026 as under:
1.The 80G order is entirely derivative of the 12AB rejection It has no independent existence. If the 12AB appeal succeeds this appeal must automatically succeed.
2.The CIT failed to independent examine the 80G application on its merits- complete non-application of mind to statutory conditions under section80G(5).
3.Cancellation of existing 80G approval is without jurisdiction without independent examination -void-ab-initio.
4.The 80G order is also without jurisdiction -The CIT exceeded his statutory scope of inquiry under section 80G(5).
5.Genuineness of charitable activities never in dispute -80G conditions independently satisfied-Rejection contrary to law.
6.Existing 80G approval duly acted upon for four years -Doctrine of legitimate expectation and protection of innocent donors.
7.Double jeopardy and disperoportionate action- Appellant penalized twice no revenue loss cancellation serves no legitimate purpose.
8.The impugned order is not a reasoned order- Rejection and cancellation by a single sentence sentence without examination is contrary to law
The brief facts of the case are that the assessee obtained registration under section 12A(1) (ac) (1) of the Act from the Central Processing Centre vide order dated 05-04-2022 bearing Unique Registration Number AACTN3700AE20211 valid from A.Y. 2022-23 to 2026-27. The said registration was registration granted by the CPC after verified the documents submitted by filed the assessee. The assessee filed an application dated 23-09-2025 in Form 10AB under sub -clause(ii) of clause (ac) of subsection (1) of section 12 for permanent registration after the expiry of the said registration. The Ld. AR submitted that the Ld. CIT(E) rejected the applications of the applicant for registration as well as for provisional registration obtain by the applicant. The Ld. CIT(E) rejecting the registration application observed as under:
6.Since 01-04-2021 the applicants under sub-clause (i) of clause (ac) of sub-section (1) of section 12A were eligible for an automated registration for 5 years by the CPC by applying Form 10A. Plain reading of the sub clause shows that only those trusts which were previously registered u/s 12A [as existed before Finance Act (No,2) 1996 or section 12AA(as it existed before TOLA Act, 2020 )were eligible to apply under this sub clause A new trust was supposed to apply under sub-clause (vi) of clause (ac) sub section(1) of Section 12A, where the CPC would have provided automated registration without ant enquiry for 3 assessment years. It is pertinent to note that the registration provided by CPC for five years is without making enquiry, as only those trusts are eligible to file under this section who have already obtained registration under old regime, after verification done by concerned Commissioner of Income Tax. However, the applicant was not previously registered under these section (12Aand 12AA) and was thus not eligible.
7.In the present case as per Form10A when the applicant selects code-01, it has to upload “self-certified copy of existing order granting registration under section 12A or section 12AA or 12AB as case may be”. In this case, the applicant did not have any existing order granting registration under section 12A or 12AA or section 12AB and was therefore not eligible to apply under sub-clause (i) of clause (ac) sub-section(1) of Section 12A. The applicant has therefore obtained registration u/s 12A (1)(ac)(i) from CPC for 5 years by misrepresentation of facts, which is also a specified violation as per clause (g) to Explanation to sub section (4) of 12ABof the IT Act.
8.In view of the above the application filed in Form 10AB for regular registration u/s 12A(1)(ac)(iii) is not maintainable at this stage, accordingly the same is hereby rejected. Further cancellation proceedings is being separately to cancel the regular registration obtained by the applicant u/s 12 A(1)(ac)(i) from CPC vide order dated 05-04-2022 having URN AATN3700AE20211 from AY 2022-23 to AY 2026-27.
On the application of the 80 G the Ld. CIT(E) observed as under:-
The applicant has filed an application dated 23-09-2025 in Form10AB for approval u/s 80G (5)(ii) of the income Tax Act,1961. The applicant was issued a questionnaire dated 21-12-2025 with a request to furnish certain details/documents/clarifications in support of its request for approval u/s 80G(5)(ii) of the Income Tax Act. The case was fixed for compliance on 05-01-2026. The applicant filed part submission on 05-01-2026.
2.Further, the registration u/s 12 A(1)(ac) of the Income Tax Act is being rejected by separate order. Hence, granting approval u/s 80G(5)(ii) is not relevant without the registration u/s 12A hence, the same is rejected and also approval under clause(i) of first proviso to sub-section (5) of section 80G obtained from AY 2022-23 to AY 2026-27 is rejected
The Ld. AR of the assessee submitted that no adverse finding was given regarding the nature or genuineness of the assessee’s charitable activities or question whether the trust’s objects are charitable in nature. The Ld. AR relied the decision of Chintpurni Mandir (Braham Akhara) v CIT(Exemption) Chandigarh in which the Co-ordinate bench observed that where the genuineness of charitable objects and activities is not disputed a mere clerical or technical error constitute a curable defect warranting rectification and not out-right rejection.
The Ld. DR has submitted that the registration application was rejected on the technical ground. He also submitted that the assessee did not have any existing order granting registration under section 12A.
We have heard both the parties and perused the material available on record. The assessee has filed applications for registration and exemption but the Ld. CIT(E) rejected the registration application as well as the exemption application under 80G of the Act. The main ground for rejection of the application is that the assessee obtained the registration for five years by misrepresentation of facts. This finding of the registration authority that the assessee has obtained the registration by misrepresentation is out of scope. The Ld. CIT(E) has not given any adverse finding regarding the nature or genuineness of the assessee’s charitable activities or nature of its objects. For granting the registration the Ld. CIT(E) should have examine the object of the trust and the genuineness of its activities. The application for registration under section 12AB (1)(b) of cannot be rejected on the ground that the assessee has obtained the registration from the CPC. If the assessee has obtained the registration from CPC by mistake, then the Ld.CIT(E) should have examine the nature object and genuineness of the trust and after that application for registration should be decided on merit. The rejection on the technical point is not proper. Since in the instant case the Ld. CIT(E) has dismissed the registration application on the technical ground therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(E) with a direction to grant one final opportunity to the assessee to substantiate, its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. CIT(E) and co-operate in the proceedings and produce all the relevant documents/ evidences. The grounds raised by the assessee are accordingly allowed for statistical purposes. Consequently, the another appeal, against the order of the Ld. CIT(E) passed us/s 80G is also remitted back to the CIT(E) with the similar directions, as aforesaid.
In the result, both the appeals of the assessee are allowed for statistical purpose.